Wendy’s and White Castle Challenge Renewable Fuel Standard to No Avail

In a big week for political news, the restaurant industry managed to make some tiny waves as well. White Castle and Wendy’s both spent time recently lobbying on Capitol Hill to repeal the Renewable Fuel Standard (RFS), a program implemented by the EPA in 2005 to ensure that a certain percentage of transportation fuel sold in the United States is made from renewable sources. The restaurant chains spoke out as part of a recent campaign called Feed Food Fairness: Take RFS Off the Menu, sponsored by the National Council of Chain Restaurants (NCCR), the primary chain restaurant trade association.

By Brady Hamed | Published 11 years ago | About a 3 minute read

The argument made by Wendy’s, White Castle and the NCCR is that under the RFS, fuel produced from soy, corn and other agricultural crops drives up food and grain prices. The NCCR accuses the RFS mandate of manipulating the corn marketplace and increasing commodity and food costs for everyone from farmers and chain restaurants down to consumers.

Last week, a number of chain restaurant industry bigwigs appeared to plead their case in Washington D.C. Robert J. Green, executive director of the NCCR, was joined by Lisa Ingram, president of White Castle; Mark Behm, a Wendy’s franchise owner; Steve Fogleson, a cattle producer and former chair of the National Cattlemen’s Beef Association; and Rep. Bob Goodlatte (R-Va.).

Unfortunately for the NCCR, they are sending some mixed messages. While it is clear they do not support the RFS, their effort to eliminate it completely is being undermined by its support for the RFS Reform Act. This piece of legislation would keep the RFS in play while limiting the scope and costs of federal requirements on the use of corn-based ethanol and other biofuels.

The NCCR's assessment of the effects of the RFS are not unfounded. According to a PricewaterhouseCooper study, the federal mandate on corn-based ethanol substantially raised prices and costs for chain restaurants on a variety of inputs and commodities. The study concludes that if the mandate continues in its current form it would increase costs in the chain restaurant industry by $3.2 billion per year for each year the RFS remains in effect. This staggering figure does give credence to the NCCR argument, yet there are social benefits in the balance as well.

For now, it seems momentum on changing the RFS is at a standstill; on Monday, the Supreme Court declined to hear a challenge from the oil and gas industry. For now, the Standard seems here to stay, but as the NCCR picks up steam, it could lead to further challenges in the future.

Other recent renewable fuel news could be a ray of hope for both the country's energy future and the NCCR: An Edinburgh-based start-up called Celtic Renewables is turning waste matter from whisky production into biobutanol, a “next-generation biofuel” whose many benefits over ethanol include producing 25% percent more energy by volume, having a lower flashpoint for easier storage, and being derived from a non-commodity food crop.